Thanks for coming. Please be seated. Thanks for being here. I can see -- (applause.) Did you say you love Laura? (Applause.) So do I. You stole my line. (Laughter.) Thanks for coming. This is an amazing experience to be here. I can see why my buddy, Gatlin, finds that extra note when he stands out here and sings. It's a fantastic hall. The last time Laura and I were here we were honoring Mother and Dad for their 50th wedding anniversary. Mother thought he'd lost his mind when he said, "Honey, I want to celebrate the 50 years of marriage at the Grand Ole Opry." I said, "Gosh, you got good judgment, Dad, you know." (Laughter.) So thanks for coming. I'm really thrilled to be here.

I should have probably come before I gave my speech. When I was on the plane flying down here, I thought, how cool would it be to give a State of the Union address in a Porter Wagner outfit. (Laughter and applause.)

I do want to give you some of the thoughts behind what I said in my State of the Union. That's what I've come to do. You know, it's one thing to give the speech -- I think it's important to come here to Nashville to tell people the reason why I said some of the things I said. I think it will help you understand why I have made some of the decisions I have made.

One of the interesting things about the presidency is we get to entertain a lot, and my favorite -- the favorite folks to entertain are the people that Laura and I grew up with. I like my buddies from West Texas. I liked them when I was young, I liked them then I was middle-age, I liked them before I was President, and I like them during President and I like them after President. And it's fun to have them come to the White House. It's neat to show off this fantastic experience that Laura and I are being able to go through. When they first walk in there, they're amazed at the White House. And the second thing is, they're amazed I'm in the White House. (Laughter.) And they always say, what's it like to be President of the United States? And after I say it's just a huge honor, which it is, I say, if I could give you the job description, it would be "decision-maker." I have to make a lot of decisions. And today what I'd like to do is share with you why I have made decisions in the context of the State of the Union I gave last night.

Before I do, I really am thrilled Laura's traveling with me. She's a great First Lady. She is -- (applause.) I'm proud to be traveling with your two United States Senators, the Majority Leader of the United States Senate, Bill Frist. (Applause.) He's a good man. He's a good guy to deal with, he is doing a fantastic job of herding cats. (Laughter.) And I'm proud to be here with Senator Lamar Alexander, as well. (Applause.)

A little later on, I'm going to talk about a key component of the competitive agenda, and that is to make sure our folks are educated for the jobs of the 21st century. And I will tell you that Lamar had a lot to do with planting this in my mind. He's, as you know, made his fame here in Tennessee for being a great education governor. You'll be pleased to hear he's carried over that passion into the halls of the United States Senate. And so in case I forget to give him credit later on, he deserves a lot of credit for making sure that we're competitive in the 21st century. (Applause.)

I appreciate the members of the statehouse who are here. Thanks for serving. I appreciate those in local government who are here. I understand the Mayor is here, Mayor Purcell. I appreciate you taking time out of your busy day. I know you didn't ask for any advice. My only advice is, fill the potholes. (Laughter and applause.) Works every time, Mayor. (Laughter.)

I want to thank the good folks here at Gaylord Entertainment for letting me come by and just explain some things to the people of Tennessee. This is such a fantastic facility. I have been here before my mother and dad's 50th wedding anniversary when I was -- happened to be involved in the baseball business. I can remember the winter meetings we held here. And we're still looking for two of our guys that worked for us. They got lost -- (laughter) -- in one of the 14 lobbies in this fantastic facility. It's a wonderful place.

I want to thank those of you who wear our nation's uniform who have joined us today. (Applause.) I particularly want to recognize Lieutenant Colonel Dan Epright. He's in active duty, U.S. Air Force. He's on a two-week leave from Iraq, where he's stationed in the International Zone in Baghdad, as the American Forces Network Iraq Commander. He's in his 20th year of active duty. I don't know where Colonel Epright is, but wherever you are, thanks for serving. Welcome back. Epright. (Applause.) Thank you very much. Is that your wife?

I knew exactly where Epright was -- I just forgot. (Laughter.) And I'm proud that his wife is with him. Yesterday I said something I really mean -- as we give praise to our troops who wear the uniform, we must also remember to give praise to military families who support the troops. (Applause.)

Our state of the union is strong. I say that because America is working hard to protect ourselves; we're spreading freedom; our economy is vigorous and strong, as well. But there's some uncertainty in people's minds. People are uncertain, in spite of our strong union, because of war. And I understand that. I think it is -- my job is as much "educator-in-chief" as it is Commander-in-Chief. And during times of uncertainty it's important for me to do what I'm doing today, which is to explain the path to victory, to do the best I can to articulate my optimism about the future.

But I understand there's an anxiety about a time of war. That's natural, it seems like to me. Even though this economy is roaring -- and it's strong, particularly when you think -- recognize we've overcome a lot. This year alone we've overcome higher energy prices and natural disasters, and yet we really are the envy of the world. Our economy is the envy of the world. And yet people are changing jobs a lot, and there's competition from India and China, which creates some uncertainty.

My worry is, is that people see that uncertainty and decide to adopt isolationist policies, or protectionist policies. In other words, in uncertain times, it's easy to -- for people to lose confidence in the capacity of this country to lead and to shape our future.

Last night in my speech, I talked about a couple of themes, and one of the themes was that we must never lose sight of our capacity to lead this world toward peace, and that we must never fear -- (applause) -- and we must never fear competition. But, on the other hand, we've got to put solid policy in place to make sure that we can compete.

First let me talk about foreign policy and why I'm concerned about isolationism. We're at war, see. A lot of my thinking in the speech I gave last night, and speeches that I have been giving, is based upon my understanding that we're at war. On September the 11th, 2001, I vowed to the American people that we would not rest and tire in order to protect us. And I have never forgotten that vow. As a matter of fact, every day -- (applause) -- every day of my presidency I think about this war. That's what you've got to understand. And so when you hear me give a speech and talk about the dangers to America, they are real -- not imagined. Some would like us to look at the world the way we would hope it would be. My job as your President is to look at the world the way it is. (Applause.)

And I clearly see the threats to America. My job is to worry about those threats. That's not your job. We got a lot of people in government worrying about those threats on your behalf, so you can go about your life. That's what we want. I knew after September the 11th, people would -- they would tend to forget the nature of the enemy and forget the war, because it's natural. Who wants to live all your day worried about the next attack? That's my job, to worry about the attack. It's the job of the intelligence community and our military and law enforcement. That's what you pay us to do. But I also recognize that if we ever get weary or tired or uncertain and withdraw within our boundaries, the enemy is not going away.

The enemy is a bunch of cold-blooded killers that have taken a great religion -- taken parts of a great religion and converted it into an ideology that is -- they perverted a great religion, and they have an ideology. We've been through ideological struggles in the past. We've have an ideological struggle against fascism and communism. And we're in that same kind of struggle now. That's what's important for the American people to understand. They have ambition. They want to spread their totalitarian empire.

People say, what do you mean by that? I say, the best thing to think about is what life was like in Afghanistan for the Taliban -- under the Taliban, for the people under the Taliban. It's a life where young girls couldn't get an education. Think about that. You talk about a dark vision of the future -- it's a life where if you didn't agree with their view of religion, you were punished. It's a life in which freedom of expression was not encouraged. It was a dim view of the world. That's what these people think like.

They have stated clearly their desire to hurt us. And we got to take what they say seriously. When the enemy says something, an enemy which attacked us brutally on September the 11th, I would hope you would want the people in government to take their word seriously -- which I do. They have said they want to drive us out of Iraq. They have said they want weapons of mass destruction. In other words, they've got an ideology that they want to spread, and they want us to retreat. That's what they have openly stated. And that is why it's essential that we remain active in the world and keep the lead for peace. We have the duty to protect the American people. And so our strategy is to never give in, and never be -- and never -- (applause.) It's to never lose heart. This enemy has got one weapon, and it's the weapon of fear.

What a fantastic country. We deeply care about every human life. The life of a child in Baghdad is precious. And so when we see these killers kill somebody -- a young child outside a hospital where one of our soldiers is handing out candy, we weep, because Americans have a deep compassion for every human being. And the only weapon they have is to cause us to weep and lose our nerve. And as I said last night, it's something I truly believe, they don't understand the nature of America. We love our freedom, and we will do everything in our power to defend our freedom. (Applause.)

And so we're on the hunt for al Qaeda, and we're going to stay on the hunt. And we will bring them to justice. No doubt in my mind -- no doubt in my mind we are bringing them to justice. We're making great progress in dismantling al Qaeda. And the others who hide won't be able to hide long enough. We're using every asset in our power to keep them on the defense, to find them and bring them to justice.

Secondly, I said something that I meant early on in this war against these terrorists, and that is, is that, to countries -- if you harbor a terrorist, you're equally as guilty as the terrorist. In other words, one of the -- (applause.) Because I understand that these terrorist networks need safe haven in order to plan and plot. We're not dealing with nation states, we're dealing with an ideological movement that needs a nation in which to hide. And so we made it clear that if you're complicit with the murderers, you're just as guilty as the murderers themselves. And that's why we took the action in Afghanistan. We gave the Taliban an opportunity to get rid of al Qaeda; they chose not to, and we acted.

So, thirdly, when we see a threat, we've got to deal with the threat. I remember growing up in Midland -- Gatlin grew up in Odessa, by the way, right down the road -- or the Gatlins did. I was white collar, he was blue collar. Anyway -- (laughter.) I'm President, he's a singer. Anyway -- (laughter.) You can tell I like him because when I put the needle out it's a sign of affection. Just don't give him the mike. Anyway -- (laughter.)

When we grew up, oceans protected us, it seemed like. We felt pretty safe and secure from a attack on American soil. We were concerned about a nuclear threat, but nevertheless, we felt secure because we were isolated from threats it seemed like. September the 11th changed my way of thinking. It changed my way of thinking on a lot of things, and one way it changed is that when we see a threat we got to deal with it. We can't hope for the best. One of the lessons of September the 11th is threats should not be allowed to fully materialize; otherwise it will cause harm to the American people.

I saw a threat in Iraq. The world saw a threat in Iraq. We gave Saddam Hussein a chance to deal with the world in good faith by honoring the United Nations Security Council resolutions. He chose -- it was his choice -- he chose to defy the resolutions. And so we took action. The world is safer, and America is more secure without Saddam Hussein in power. (Applause.)

I recognize in a free society like ours there can be, and should be, debate on big matters. I welcome the debate. But as I said last night to Congress, whether you agree or not agree with the decision, this country has one option, and that's victory in Iraq. (Applause.) I say that because the enemy has said they want to drive us out of Iraq and use it as safe haven. We've got to take the word seriously of those who want to do us harm.

I want to describe right quick our plans for victory in Iraq. First of all, anytime we put our troops in harm's way we got to go in with victory in mind. And the victory is for Iraq to be a democracy that can sustain itself and govern itself and defend itself, a country which will be an ally in the war on terror, a country which will deny safe haven to the al Qaeda, and a country which will serve as a powerful example of liberty and freedom in a part of the world that is desperate for liberty and freedom. (Applause.)

The Iraqis have shown incredible courage and a strong desire to live in democracy. If you really think about last year, the year 2005, the progress toward democracy was remarkable. Anyway you look at it, it was remarkable. This young democracy has gone from tyranny -- a brutal dictator that killed or had killed thousands of people, to a country which had a transitional government in an election, to a country which wrote a progressive constitution for the Middle East and had that constitution ratified, to a country in which 11 million people voted in elections last December. You see one of the things that -- (applause) -- one of the inherent parts of my foreign policy is my strong belief that liberty is universal, that everybody desires to be free, that freedom is not just a Western idea, or an American idea, freedom is lodged in the soul of every person. I used -- I put it -- let me put it another way to you, I believe there's an Almighty. And I believe the Almighty's gift is freedom to every single person in this world. (Applause.)

And if you believe that -- I'm just getting wound up here. I told Laura, I'd try to keep it under a couple hours. (Laughter.) If you believe that -- if you believe that, that freedom is universal, then it shouldn't surprise you that 11 million people, more or less, went to the polls. People want to be free, and the Iraqis are showing the world that.

Secondly, we've got to make sure their economy is able to function as good as possible so that people see the benefits of democracy. It's one thing to have elections; it's another thing for people to say, democracy is good for me, democracy is good for my family. And so we're working on reconstruction and fighting corruption, and making sure that there are tangible benefits. And it's been difficult because the enemy is not only brutal in terms of killing people, the enemy is just relentless in trying to destroy infrastructure so that people cannot see the benefits of democracy.

And the third aspect -- and it's one that I know is dear to the hearts of many people -- is, how long will we be in Iraq? And the answer is this --it's a security aspect. And that is that if people want to be free, and if 11 million people chose to vote, the question on people's mind is, is there a willingness for the Iraqis to defend their own freedom. And I will tell you, the answer we have seen, our commanders on the ground have seen, is, absolutely. Absolutely. There is great bravery amongst these Iraqi soldiers. Our job is to convert their desire to protect their new democracy into effective forces. And that's what we're doing.

We've changed our training patterns. When we first got in there -- one of the things I talked about over the Christmas season, or the holiday season -- prior to the holiday season -- was that we've adjusted. That's what happens. We see things and we change. We've done things differently. When we first went in there, we helped train an army for an external threat. Well, sure enough, the external threat wasn't nearly as significant as the internal threat. And so we started adjusting our training tactics. And we got good advice from members of the Senate and the House from both political parties who went to Iraq and came back and said, here's what we've seen. And so we're changing.

And the security forces of Iraq are up to about 230,000, more or less. But the question is not just numbers. I first asked about numbers. You'd read about these suiciders knocking people off that were trying to stand these recruiting stations, and so the question is, are you able to get recruits? If it's dangerous to sign up, are you able to sign people up? And the answer is, absolutely. People wanted to serve the Iraqi military. This is a good sign about whether or not we're succeeding in our mission in training folks to defend their freedom. And if they're willing to sign up in the face of suiciders, it says something about their desire to protect their country.

The second question is, can they do the job? Are we training them well enough so they can take the fight on their own? And the election was an interesting example where the Iraqis were in the lead, and the violence in the last election was significantly lower than the violence in the first election.

Today, by video, I met with my -- I met not only in the room with my national security team, but we had the Ambassador and General Casey from Baghdad. And it's interesting to be able to communicate with your commanders on the ground in real time. And the reason I bring that up is that they are constantly updating the national security team and me about the effectiveness of these troops, and how much territory we're turning over to the Iraqi troops.

What I have told the American people is, as the Iraqis stand up, we will stand down. As the Iraqis are capable of taking the fight to the enemy, we will reduce our troop levels. We have two less brigades there than we thought. In other words, these troops are being trained -- the troops that we're training are more effective, more capable of taking the fight to the enemy. The commanders on the ground say we need less American presence.

Now, I'm going to tell you something about timetables and withdrawals and all that business. It is a mistake to have a definite timetable of withdrawal because the enemy will react, the Iraqis will react, and it's not fair to the men and women who wear the uniform. (Applause.)

So I will make my decisions based upon what these commanders tell me. That's what you expect of the Commander-in-Chief. My job is to set the strategy. I just told you what victory is all about. We've defined victory. And now it's up to the commanders on the ground to help us achieve that victory. And if they say these Iraqis are capable of taking the fight, they're there firsthand to tell me that, and then we'll reduce our troops based upon their recommendation, not based upon the politics in Washington, D.C. (Applause.)

Another reason -- in other words, we can't be isolationists and win the war on terror. And we can't be isolationist, either, because it would prevent us from doing our duty around the world, and not only make this world a place where terrorists have trouble recruiting, but to live to that admonition, "to whom much is given much is required."

Effective foreign policy is -- recognizes that we can help change conditions on the ground to make life better for future generations of Americans. And I believe that helping defeat HIV/AIDS on the continent of Africa is -- not only reflects the great compassion of America, but it will improve lives for generations of Americans to come. I believe defeating hopelessness and despair and helping others defeat poverty is in our national interest. I also know it reflects the deep character of the American people.

If this country were to become isolationist and withdraw, and say we don't care about conditions of life elsewhere, we're not only ceding the ground to terrorists, we're not doing our duty as a compassionate nation.

Do you realize we feed a lot of the hungry in the world -- and I'm proud of that record -- that we're providing incredibly important lifesaving antiretroviral drugs to help defeat HIV/AIDS on the continent of Africa. There is a pandemic sweeping that continent, and the United States of America is leading the world in helping save lives. Do you realize that when the tsunami earlier this past year, it was the United States military that moved in and provided immediate help and aid and comfort and organization. Our choppers were flying rescue missions in Pakistan after the devastating earthquake. In my judgment, an active foreign policy, one that aids the suffering and helps the poor, is one that is in the interest of the United States of America, both short-term and long-term. (Applause.)

And finally, if we were to withdraw, not only would we cede ground to the terrorists and endanger this country, we would miss a fantastic opportunity to help spread liberty. In my speech I mentioned Roosevelt and Kennedy, Truman and Reagan. I did so because I wanted to remind the American people that these leaders were one that acted in confidence in our values. They understood when America led, not only was America better off, but the world was. And we spreading freedom now.

For those of you who are young, I want you to watch the spread of freedom in our world. It's amazing to see, when you think about it. The vote in Afghanistan was part of freedom's march. The vote in Iraq is part of freedom's march. People in Lebanon want to be free from Syria, and we're working -- the Palestinians voted. Now, that election was an important election because it said what the people on the street wanted. They wanted clean government. They want people to pay attention to the education needs and their health needs. In order for us to -- and Hamas, by the way, now has a choice to make. If they want to work with the United States of America, they must renounce their desire to destroy Israel; they must be a partner in peace. (Applause.)

Last night I spoke to the people of Iran -- spoke first to the government of Iran and said, the world will continue to come together in unity to say you can't have nuclear weapons. But I also spoke to the people, because I believe that everybody desires to be free, and I just wanted to assure them that someday that they will be able to have a choice in their government, and the United States looks forward to a friendship with a free and democratic Iran.

Liberty is universal. But it's important also to understand that freedom and liberty yield the peace we all want. One reason to be active in the world is to spread peace. If the United States were to withdraw, we'd miss an opportunity to make this world a more peaceful place for generations to come.

I like to tell people about my relationship with Prime Minister Koizumi because it helps drive home the point about freedom yielding peace. You know, my dad and I suspect a lot of your relatives fought against the Japanese in World War II. They were the sworn enemy of the United States of America. If there are any World War II vets here, they'll tell you what it was like during that period of time. The Japanese attacked us, and we vowed to do everything in our power to defeat them. And we sent a lot of kids into battle, and we lost a lot of lives. And the Japanese lost a lot of lives. It was a brutal battle, and we won.

Interestingly enough, one of the people that I work closest with in the world is the Prime Minister of Japan. Isn't that interesting? At least it is to me. My dad fought them, and now his son is working to keep the peace with the Prime Minister of the country that he went to war against. And so what happened between when he was 18 and I'm sitting here at 59? I'll tell you what happened, in between; Japan adopted a Japanese-style democracy. Freedom has the capacity to convert enemies into allies. Freedom has the capacity to lay -- (applause) -- freedom has that capacity to lay that foundation for peace for generations to come.

I believe we will be victorious in Iraq, and I know that by laying that foundation of peace in the Middle East, we'll be able to say: Job well done. We have laid -- we have made a better chance for peace for a generation of Americans coming up. Someday an American President will be sitting down with a duly elected leader of Iraq, working on keeping that peace, and a new generation of Americans will say, thank goodness this generation accepted the responsibilities given to them. (Applause.)

Talk about a couple of other issues. There is a duty of us in Washington to protect you. One of the important aspects of protecting you is to make sure our law enforcement has all the tools necessary to do their job. Right after September the 11th, members of both political parties came together and said, let us make sure that we make sure that we tear down walls between intelligence-gathering service and law enforcement services in America so they can share information to connect dots and protect the people. And so they passed what's called the Patriot Act. The Patriot Act is an important piece of legislation, in my judgment, because it says to folks, here's some tools that we use in other areas of law enforcement now applicable to intelligence, to protecting you. For example, some of the tools in the Patriot Act were already being used by people fighting off drug lords, or Medicaid fraud, interestingly enough. The Patriot Act had safeguards designed in it where the programs were reviewed, and if people had complaints about abuse of civil liberty, they could bring them, and we would know whether or not the law was meeting intended consequences.

The laws work. It's been a very important took for our law enforcement officials. The Patriot Act is set to expire. The war against terrorists is not expiring. These people need the tools necessary to do their job. It's essential that Congress reauthorize the Patriot Act. (Applause.)

I want to take a little time to explain the terrorist surveillance program to you. First, if I was trying to pull a fast one on the American people, why did I brief Congress? In other words -- (applause.) Right after September the 11th, it was apparent that there -- some of the hijackers in the United States who were calling al Qaeda -- al Qaeda operatives calling overseas. We don't know what they were talking about. Matter of fact, we found out about the calls after it was too late. But I was concerned about a system that wasn't doing everything we could to protect the American people, within the Constitution. And so, as you would hope that the Commander-in-Chief would do, I said to our operators, people responsible for protecting you, are we doing everything we can to protect you. Come up with other ways to connect the dots. And this terrorist surveillance program was designed by very capable operatives.

But before I implemented the program -- I'm mindful of the fact that I took an oath to uphold the Constitution and the laws of the United States. So I had lawyers -- the Attorney General and the Justice Department look at what I was doing. I'm also mindful that people want to make sure the President safeguards civil liberties while we protect the country, that there needs to be a balance. And so this is a program -- and I became comfortable with that balance, and confident that I had the legal authority to do what I did.

And so let me tell you what I did without talking about the operating details. I'm sure you can understand why you don't want the President or anybody talking about the operating details. If you're at war, and you're trying to stop an enemy from attacking you, why in the world would you want to tell the enemy what they're doing to stop them, because they'll adjust. (Applause.) So I've authorized NSA to listen to a phone call from outside the United States in, or inside the United States out. In other words, this is not a program where we're listening to phone calls inside the United States. One of the people making the call has to be al Qaeda, suspected al Qaeda, and/or affiliate.

This is a program in which we have briefed key members of the Congress a lot of times. It is constantly reviewed by a legal team, constantly reviewed. It is constantly reviewed inside NSA by a legal team. We are safeguarding your liberties. (Applause.)

Federal courts have ruled that the President -- a President has constitutional authority to use foreign intelligence surveillance against enemies. Previous Presidents have used the same constitutional authority I have. I've got statutory authority, as well. The Congress passed the authorization to use military force against al Qaeda after September the 11th, and the Supreme Court, in a recent opinion, ruled that the President -- the Congress gave me the authority to use what's called the "fundamental incidents of war." In other words, Congress authorized me to use force in the fundamental incidents of war, which means in this case, you can't defeat the enemy until you know when the enemy is going to hit. And therefore, using this surveillance to find out the intention of the enemy is a fundamental incident of war to protect the American people. Let me put it to you in Texan: If al Qaeda is calling into the United States, we want to know. (Applause.)

Here's the challenge at home -- we got a great economy; the American people are amazing when you unleash their creativity and talent. The entrepreneurial spirit of this country is strong when we reinforce that entrepreneurial spirit. Over the past two and a half years this economy has created 4.6 million new jobs; the unemployment rate is 4.9 percent. Small businesses are flourishing. After-tax income since '01 is up 7 percent. Productivity is very high, which is important for quality of life and higher standards of living. Home ownership is at an all-time high; more minorities own a home today in America than ever before in our nation's history. This economy is doing just fine. (Applause.)

But the question is, how do we stay competitive? What do we do to make sure, in a world in which competition is becoming fiercer and fiercer, what do we do to stay ahead of it? Now, some would say, protect yourselves by withdrawing from the world. I think that is a huge mistake. Protectionism doesn't work. Protectionism would default to other countries in the world. That's not the American way. America must be confident and lead, and do what is necessary to keep us competitive.

And I've got some ideas for you. First, in order to make sure we're competitive, this economy has got to continue to grow. Last night I said an interesting statistic -- at least I thought it was; otherwise I wouldn't have said it, but -- (laughter.) I said the tax relief we passed left $880 billion in the hands of American families and small businesses and entrepreneurs. See, my philosophy is that the more money you got, the more of your own money you keep, you will save and invest and spend, and that's how this economy grows. And the tax relief we passed is working because the American people -- (applause) -- are responding.

And so how do we make sure that we have economic vitality and growth. Well, one thing you don't want to do is take money out of -- if it has worked, why take money out of your pocket? And the tax relief we passed is set to expire. If Congress doesn't do anything, your taxes are going to go up, which, in my judgment, would be bad for the economy. In order to keep America competitive, the Congress needs to make the tax relief permanent. (Applause.)

You'll hear folks say, well, we got to run up your taxes in order to balance the budget. That's not the way it works in Washington. They're going to raise your taxes so they can find new ways to spend your money. That's how it works. (Applause.) So I want the tax cuts permanent, and I want to work on the deficit by controlling federal spending. (Applause.)

We can meet priorities. We can meet priorities. See, you got to set priorities in order to meet priorities. So long as we've got kids in harm's way, a priority will be to make sure our troops have what's necessary to do their job. (Applause.)

We got a plan to cut this deficit in half by 2009. It's just going to take Congress making some hard choices. Part of my job is to present a budget that gives them a chance to show how to cut that deficit in half by 2009. Looking forward to working with them on achieving this objective. (Laughter.) But the long-term problem we got is the mandatory spending. And I want to spend a little time on it.

There's -- we got a real issue with Social Security and Medicare. And the reason why is guys like me are fixing to retire. I'm turning 62, retirement age, in 2008, which is a convenient coincidence. (Laughter.) I'm looking around and I see some other baby boomers out there, too. And we're going to stress the system. There's a lot of us getting ready to retire, a heck of a lot more than have been retired. And we've been promised a lot. And a lot of young guys are going to be having to pay into a system that is flat going broke. That's the reality.

It's hard for me to be the President and look at young workers, young people coming into the workforce, paying payroll taxes into a system that I know is going broke. And it is. We've been promised too much, and too few people paying into the system. And now we need to do something about it, because this mandatory spending, these entitlement programs, are going to make it really hard for future Congresses and future taxpayers.

I tried last year with the Social Security plan. I thought my job was not only to raise the issue, but to come up with some solutions. One of my first objectives was to explain to the American people, we got a problem. I believe that until Congress hears from the people that we got a problem that their attitude is going to be, nobody thinks we got a problem, why do anything about it? People now know we got a problem.

Last night I said to members of Congress the truth: We're not going to be able to solve this issue until we bring Republicans and Democrats together. It's a big issue solving the baby boomer -- (applause.) We can get the job done. You don't have to cut benefits to people; you just got to slow them down so that the next generation can afford them. Do you realize my benefits, or your benefits grow faster than the rate of inflation? I mean, in other words, there's ways to make it work. But it's going to require a new attitude in Washington, D.C. There's too much politics up there. There's too much zero-sum. (Applause.) I want the Democrats on Capitol Hill to hear loud and clear: I want a bipartisan on mandatory and entitlement spending for the sake of future generations of Americans. (Applause.)

I want to talk about four other issues right quick. You still awake? (Laughter.) They didn't come all the way to hear this, kind of getting shortchanged. I'll make it quick. It's important for us to stay competitive to open up markets. The temptation is to shut markets down. I'm confident in our ability. I'm confident in our farmers, I'm confident in our entrepreneurs. I think the job -- I know the job of the President is to work to open up markets and level the playing field. My attitude is this: We say to countries, you treat us the way we treat you, and when they do, nobody can out-compete the American worker and farmer and entrepreneur. (Applause.)

A big issue is immigration. It's important for us to get this issue solved so that we can be competitive as we go out into the 21st century. First of all, the obligation of the federal government is to enforce our borders, is to make sure that -- (applause.) And I want to thank Leader Frist for passing a strong appropriations bill to provide resources necessary for more Border Patrol technology along the border. Listen, the border is long, and it's not easy to enforce. But with proper use of technology, some physical barriers, I think we'll be able to do a much better job.

The second issue along the border, by the way, is that when we catch somebody sneaking into our country illegally, we just can't release them out into the system. We've got to have more detention space -- (applause) -- we've got to have more detention space so that -- it used to be they'd catch them, a lot of the folks, they'd say, all right, check back in with your immigration judge here in 45 days. And the guy would say, yes, you bet. (Laughter.) See you later. So we're changing that along the border.

I do want to talk about the worker issue. A lot of people here in America have come to do jobs Americans won't do. And they're here because they can make money for their families. I used to tell people in Texas that family values didn't stop at the Rio Grande River. If you're a mother or a dad and you want to put food on the table for your children, and you had the choice between $5 and $50, you'd head for $50 if you could.

I believe a very significant part of enforcing our border, make it easier for our Border Patrol to do the job, is to end this system that encourages smuggling and pressure on the border by people sneaking across, and saying if there is somebody that's willing to do a job an American won't do, let's give him a fool-proof pass so they can be here on a temporary basis.

Now, I'm against amnesty, and the reason I am is I believe if you grant amnesty to people that are here, it will cause another wave of people to want to come. (Applause.) But I am for recognizing reality and saying that if you're doing a job, if you're an employer and you're looking for somebody to do a job an American won't do, then here is a card for a temporary worker. That's a humane way to treat the issue. I can't stand a system that has caused people to get stuffed in the back of 18-wheelers and they're driving across the desert. We have -- because of our policy, we have caused there to be a whole smuggling industry, and a forgery industry. If you're out there working and somebody shows up and you can't find somebody to find work, and they show up and you say, show me your card -- you don't know whether it's real or not real. There are people forging cards in order to help these people find work.

We've got Border Patrol agents chasing people getting smuggled across the border to do work. If you are able to have a rational plan on a temporary worker basis, it doesn't seem like to me they're not going to have to try to sneak across the border, and our Border Patrol will be able to do a better job on drugs and terrorists and guns that are trying to be snuck in and out of this country. Immigration is an important issue and I'm looking forward to working with Congress to get a job done on behalf of the American people. (Applause.)

I want to talk about health care right quick. The job of the federal government is to take care of the elderly and the poor. We're rolling out a Medicare plan that is going to make medicine for our seniors modern, up-to-date and work well. It's a really important reform.

Listen, if you say we're going to provide medicine for our seniors, you need to provide the best medicine possible for our seniors. And that means including prescription drug coverage for the seniors. And that's what's happening. We got -- millions of people are signing up for this program. We've been in it for about four weeks. We're going to correct problems. Most of the people signing up are finding out it's a good deal. I urge seniors to look at this program carefully and sign up.

We also have an obligation to the poor, which we're taking care of in Medicaid. But I want to give you another way of dealing with medicine other than having the federal government run it all, which I am unalterably opposed to. I think, one, we ought to have policies that encourage the doctor-patient relationship, strengthen that relationship. Secondly, we got to be wise about how we help control costs. One way to control costs is to spread information technology out -- throughout the health care field.

Let me put it to you this way: Health care is kind of lagging behind when it comes to using modern technology. Think about it -- you got docs still writing out those files. And they hand that file to you and say, take it down the hall. You're moving paper still in a paperless world. The problem is, not only are you moving paper, but doctors can't write in the first place. (Laughter.) It creates inefficiencies in the system. There are too many medical errors. By spreading information technology, which -- Bill Frist and I went to a hospital, I think it was here in Nashville, where they've got a modern information technology system being put in place. They're going to save 20 percent to 30 percent on health care costs -- it's a rationale way of helping control health care without the federal government getting in your business. (Applause.) I'm for allowing small businesses to pool risk across jurisdictional boundaries so they have the opportunity of buying health care at the same discount big businesses get. (Applause.)

I am big believer in health savings accounts. For those of you who don't know health savings accounts, investigate health savings accounts. They're an innovative way to make sure the doctor-patient relationship is strong, that people are in charge of making the health care decisions themselves, that there is an incentive to taking care of your body through good exercise and good nutrition. It's a way to save money tax-free in your health care, and at the same time get coverage for catastrophic illness. These make sense for small businesses; they make sense for individuals. And I'm going to ask Congress to make them more available and more attractive for individual consumers all across the United States. (Applause.)

Finally, if you want to do something about availability of health care and affordability of health care, we have got to get the United States Senate to pass medical liability reform. (Applause.) You don't have to worry about Frist. No, he understands. We got a problem with OB/GYNs. I said last night a statistic which should alarm the American people: There are 1,500 countries in America in which a woman can't find an OB/GYN. And a lot of that has to do with lawsuits, driving good docs out of practice. This isn't right, folks. This isn't right. It's time for those senators who are blocking that bill, those senators who are representing the trial lawyers of America, to understand the damage they're doing to the health care industry of this country. (Applause.)

I'm just getting warmed up. (Laughter.) In order to stay competitive, America must end its dependence on oil. (Applause.) When you're hooked on oil from the Middle East, it means you've got an economic security issue and a national security issue. And I spoke last night to some exciting opportunities here in America. I believe -- I know that technology is going to enable us to diversify away from being dependent on hydrocarbon, from oil.

Let me talk about cars, and that's really the area where we can achieve a lot of independence. We use a lot of foreign oil in our automobiles, and we drive a lot. and people say, well, CAFE this and CAFE that. Actually, we have increased CAFE standards for certain types of vehicles during my administration, and that's important, as is giving people choice, and marketplace function is important. But most important of all, it seems like to me, if you recognize the fact that being dependent upon oil is a problem for the long-term, then why don't we figure out how to drive our cars using a different type of fuel?

Now, let me talk about two things that we're working on. We spent -- I said last night, we've spent $10 billion since I've been President on research, and we're close to some really interesting breakthroughs. One such breakthrough is advanced batteries, which will make the hybrid car, or the electric car, much more affordable and much more suitable to the consumer demands. You don't want your battery running out halfway between here and somewhere else.

But I do want to talk about ethanol right quick. You know, we're making ethanol out of corn right now. We're very close to a breakthrough where we'll be able to figure out how to make ethanol from other forms, other materials, like grasses, woods. Now, think about that. All of a sudden -- we may be in the energy business by being able to grow grass on the ranch -- (laughter) -- and have it harvested and converted into energy. And that's what's close to happening. We're told that if we continue to focus on research, we'll be able to, within six years, have a competitive fuel to gasoline.

Now, people say, well, that's great; how about the automobile? Will they be able to use it? Four-and-a-half million cars today are flex-fuel automobiles. In other words, they can either use gasoline or ethanol. So the technology is there for the automobile, and we're close to the technology of providing a competitive fuel to gasoline by converting that which we grow into fuel. It's coming. It's an exciting time. I can't wait to work with Congress to continue promoting this kind of research so that someday, we're no longer dependent on Middle Eastern oil.

People say, well, why can't -- once you get the fuel, why can't you just convert your fleet instantly? We've got 200 million cars out there. It takes a while for new automobiles to become the main, dominant part of the automobile fleet. What I'm telling you is, is that we're close to some breakthroughs. These are exciting times. Technology is going to help keep this country competitive.

But the thing that's going to keep the country most competitive is making sure our workforce has got the skills to compete. This is a dynamic world. Whether the people want to recognize it or not, we're in a competitive world. Some will say it's so competitive, let's withdraw and protect ourselves. That's not my attitude. My attitude is if it's competitive, let's get in a position where we can out-compete the rest of the world. And the most important place is going to be to make sure our kids have got the skills to fill the jobs of the 21st century. If our kids don't have those skills, those jobs will go somewhere else.

And so this is the initiative that I praised Lamar about -- it's called the America Competitiveness Initiative. It basically says that we're going to focus on research, both in public and private sector, to make sure that the technologies and skill base of our science and engineering community leads the world. It also recognizes that we've got to make sure our children have got math and science skills. By the way, that starts with making sure children can read. One of Laura's most important initiatives and inherent in the No Child Left Behind Act is the absolute demand by our government that schools teach every single child how to read by 4th grade -- or 3rd grade -- and remain at grade level throughout their entire public school career. (Applause.)

One of the ways to make sure that our children have got math and science skills that will give them the basics on which to compete -- and, by the way, when you test our scores relative to other children, we're doing just fine in elementary school, and we start slipping off in middle school, and we're not doing worth a darn in high school. And so one way to reverse that trend is to make sure our high school teachers have got the necessary skills to teach kids the skill sets to be able to compete. And so we believe that we can help train 70,000 high school teachers to lead advanced placement courses in math and science.

Advanced placement works. AP is a vital program. If you study your AP results here in Tennessee schools, you'll see it makes a lot of sense. We want AP programs to be available to children from all walks of life so that they have the skills necessary to compete. We got a plan to get 30,000 math and science professionals to teach in our classrooms. And we want to make sure, just like we do on No Child Left Behind, that we focus on math, as well, and we find math deficiencies early, we provide money to correct them. See, if you diagnose and don't correct, you're doing a child a disservice. If you don't diagnose, you're doing a child a disservice. The best thing to do is what we're doing, is diagnose and solve problems early before they're too late. And that's what we're going to do in this very exciting initiative. (Applause.)

A couple of other things I want to talk about. What I just told you is how to stay competitive. See, we have a choice. We can withdraw and say, okay, you all go do your thing and we'll just protect ourselves inside America; or we can compete. And I just laid out an agenda for America to lead. I believe that the way you enhance prosperity for the American people is you shape your own destiny. And America has been a leader, and will continue to be a leader in the world economy. (Applause.)

What really matters in the long-term is the character of the American people. The great strength of this country is the compassion of our citizens. It really is. I like to remind people that de Tocqueville got it right when he came and looked at America in the 1830s and recognized the voluntary associations, the ability for people to serve something greater than themselves was the strength of America then, and it's the strength of America now.

One of the reasons why I mentioned Laura last night and her program is not only I want her to get a little air time -- (laughter) -- but she's heading up a very important effort to encourage mentors to help say to a child, I love you, what can I do to help you, how can I help you realize you need to make the right choices in life in order to succeed.

I see a Scout there. The Scouting program is a great mentoring program. (Applause.) But there are all kinds of ways you can help, all kinds of ways you can help get involved with people's lives. Last night, we honored some folks by putting them in the box there during the State of the Union -- I guess it's an honor when you sit there and have to listen to an old guy for an hour. But anyway, nevertheless, they were there. And one of them was a young guy that was volunteering down there in -- for those affected by the hurricanes. One of the things about that hurricane is we're going to make sure that we analyze the response and, as I said, we just do as good a job as we should have done at all levels of government. As the head of the federal government, I take responsibility for that. But having said that, the response of the American people to these hurricanes was unbelievable. People were uprooted out of their homes. They were wandering out there, wondering whether or not anybody cared. And thousands of our fellow citizens had open arms and said, "I care about you, how can I help you?" It was a remarkable, remarkable thing to watch. It has reconfirmed my great faith in the American people.

The government has got a role. As I mentioned last night, we've committed $85 billion to help the people get on their feet down there. We're going to stay with them. We'll help them. And the American people are helping them, as well.

Another thing I talked about last night, to make sure that our country is hopeful and the spirits are up is that when you look at Washington you've got to be assured that people are upholding the integrity that you expect them to. I look forward to working with Congress on ethics reform. We have a solemn duty and an obligation to say to the American people that we will uphold the honor of the offices to which we have been elected.

I do want to say something about judges. I want to thank both senators here for voting to confirm a good man. Laura and I are going to -- if I can ever stop speaking here -- (laughter) -- we're going to go back and have a swearing-in ceremony for Judge Sam Alito. (Applause.) The reason I bring this up is that part of making sure America knows there's a hopeful tomorrow is that a lot of Americans don't like it when judges kind of write the law. We've got plenty of legislators in Washington. (Applause.) Believe me, we've got plenty of legislators in Washington. And so I'm going to put judges on the bench who know the difference between interpreting the Constitution and trying to write the law. I'll continue to do that. (Applause.)

And so that's what's on my mind, and it took me an hour to tell you. (Laughter.) I hope you get the sense of my optimism about the country. I told you mine is a decision-making job. I first learned that when the guy called me -- I was getting ready to give my inaugural address, right before the swearing-in of the first term. And a guy called me and said, "What color rug do you want in the Oval Office?" I said, man, this is a decision-making job. (Laughter.) What color rug do I want? The second thing about decision-making is you've got to know when it's time to delegate. So not knowing much about rug designing, I said, "Laura, give me a hand." (Laughter.)

And the third thing about my job is you've got to set a strategic vision. I set the strategic vision last night for our country: Active in the pursuit of our own security and the spread of freedom; confident in our ability to compete in the world; understanding we need to continually re-commit ourselves to serving others. And so I said, "Laura, the only thing I want is that rug to say -- you figure out how to say it -- is optimistic person comes here to work every day." And she captured my spirit, because I am optimistic about our future.

Thanks for giving me a chance to share that optimism with you. God bless. (Applause.)